Person:
Fay, Marianne

Latin America and the Caribbean Region, The World Bank

Fields of Specialization

Urban economics, Infrastructure economics, Climate change

Departments

Latin America and the Caribbean Region, The World Bank

Last updated: April 12, 2023

Biography

Marianne Fay, an economist specializing in sustainable development, is the World Bank director for Bolivia, Chile, Ecuador and Peru. She has 25 years’ experience in different regions of the world, contributing to knowledge on and the search for development solutions in the areas of infrastructure, urbanization, climate change, green growth and poverty reduction. She has published and edited several books and articles, including the “World Development Report 2010: Development and Climate Change,” and the report “Infrastructure in Latin America and the Caribbean: Recent Developments and Key Challenges.” Marianne is a U.S.-French binational.

Full item page

Publication Search Results

Now showing 1 - 10 of 13

From Growth to Green Growth : A Framework
(2011-11-01) Heal, Geoffrey; Hallegatte, Stephane; Treguer, David; Fay, Marianne
Green growth is about making growth processes resource-efficient, cleaner and more resilient without necessarily slowing them. This paper aims at clarifying these concepts in an analytical framework and at proposing foundations for green growth. The green growth approach proposed here is based on (1) focusing on what needs to happen over the next 5-10 years before the world gets locked into patterns that would be prohibitively expensive and complex to modify and (2) reconciling the short and the long term, by offsetting short-term costs and maximizing synergies and economic co-benefits. This, in turn, increases the social and political acceptability of environmental policies. This framework identifies channels through which green policies can potentially contribute to economic growth. However, only detailed country- and context-specific analyses for each of these channels could reach firm conclusion regarding their actual impact on growth. Finally, the paper discusses the policies that can be implemented to capture these co-benefits and environmental benefits. Since green growth policies pursue a variety of goals, they are best served by a combination of instruments: price-based policies are important but are only one component in a policy tool-box that can also include norms and regulation, public production and direct investment, information creation and dissemination, education and moral suasion, or industrial and innovation policies.
Climate Change and Poverty : An Analytical Framework
(World Bank Group, Washington, DC, 2014-11) Bangalore, Mook; Hallegatte, Stephane; Bonzanigo, Laura; Fay, Marianne; Narloch, Ulf; Rozenberg, Julie; Vogt-Schilb, Adrien
Climate change and climate policies will affect poverty reduction efforts through direct and immediate impacts on the poor and by affecting factors that condition poverty reduction, such as economic growth. This paper explores this relation between climate change and policies and poverty outcomes by examining three questions: the (static) impact on poor people's livelihood and well-being; the impact on the risk for non-poor individuals to fall into poverty; and the impact on the ability of poor people to escape poverty. The paper proposes four channels that determine household consumption and through which households may escape or fall into poverty (prices, assets, productivity, and opportunities). It then discusses whether and how these channels are affected by climate change and climate policies, focusing on the exposure, vulnerability, and ability to adapt of the poor (and those vulnerable to poverty). It reviews the existing literature and offers three major conclusions. First, climate change is likely to represent a major obstacle to a sustained eradication of poverty. Second, climate policies are compatible with poverty reduction provided that (i) poverty concerns are carefully taken into account in their design and (ii) they are accompanied by the appropriate set of social policies. Third, climate change does not modify how poverty policies should be designed, but it creates greater needs and more urgency. The scale issue is explained by the fact that climate will cause more frequent and more severe shocks; the urgency, by the need to exploit the window of opportunity given to us before climate impacts are likely to substantially increase.
Green Industrial Policies : When and How
(World Bank, Washington, DC, 2013-10) Hallegatte, Stephane; Fay, Marianne; Vogt-Schilb, Adrien
Green industrial policies can be defined as industrial policies with an environmental goal -- or more precisely, as sector-targeted policies that affect the economic production structure with the aim of generating environmental benefits. This paper provides a framework to assess their desirability depending on the effectiveness and political acceptability of price instruments. The main messages are the following. (i) Greening growth processes to the extent and with the speed needed cannot be done without industrial policies, even if prices can be adjusted to reflect environmental objectives. (ii) "Sunrise" green industrial policies are needed because they support the development of critical new technologies and sectors, bring down costs, and allow for reduced emissions in the short term even in the absence of carbon pricing. (iii) "Sunset" green industrial policies and trade policies may be needed in conjunction with safety nets to make carbon pricing politically or socially acceptable. They can help mitigate the impact of a carbon price on competitiveness and unemployment and smooth the transition by helping industries adjust to the new conditions. (iv) Green or not, industrial policy requires carefully navigating the twin dangers of market and governance failure. The viability of supported technologies and sectors is difficult to assess through a market-test given their dependence on continued environmental policies or pricing -- such as a carbon price. Particular attention must be paid to avoid potential unintended negative effects, such as rebound effects (especially if prices are inappropriate), misallocation of capital, or capture and rent-seeking behaviors.
Hitting the Trillion Mark: A Look at How Much Countries Are Spending on Infrastructure
(World Bank, Washington, DC, 2019-02) Lee, Hyoung Il; Fay, Marianne; Mastruzzi, Massimo; Han, Sungmin; Cho, Moonkyoung
The paper provides the first consistently estimated data set on infrastructure investments in low- and middle-income countries. To do so, the authors identify three possible proxies for infrastructure investments: two are variants on gross fixed capital formation from national accounts system data following ADB (2017) and one is based on fiscal data from the World Bank's BOOST database. Two of these proxies rely on the World Bank's Private Participation in Infrastructure database to capture the private share of infrastructure investments. Given the limitations of each of these proxies, the authors employ several transformations to derive a lower-bound estimate for infrastructure investments in low-and middle-income countries of 3.40 percent of their gross domestic product, a central estimate of around 4 percent, and an upper-bound estimate of 5 percent for 2011. Corresponding absolute amounts are US$0.82 trillion, US$1.00 trillion, and US$1.21 trillion, respectively with East Asia and the Pacific accounting for 55 percent of infrastructure investments and Africa 4 percent. The public sector largely dominates infrastructure spending, accounting for 87–91 percent of infrastructure investments, but with wide variation across regions, from a low of 53–64 percent in South Asia to a high of 98 percent in East Asia. Given the absence of fiscal or national accounts data capturing investments in infrastructure, these estimates are likely to be the best available in the near future. Nevertheless, the authors propose some possible avenues for future improvements (including an update when 2017 data are made available by the International Comparison Project), building on the excellent collaboration of multilateral development banks around this issue.
Beyond the Gap: How Countries Can Afford the Infrastructure They Need while Protecting the Planet
(Washington, DC: World Bank, 2019-02-19) Rozenberg, Julie; Fay, Marianne; Rozenberg, Julie; Fay, Marianne; Fox, Charles J.E.; Leifman, Michael M.; Lopez-Alascio, Blanca; Nicolas, Claire
Beyond the Gap: How Countries Can Afford the Infrastructure They Need while Protecting the Planet aims to shift the debate regarding investment needs away from a simple focus on spending more and toward a focus on spending better on the right objectives, using relevant metrics. It does so by offering a careful and systematic approach to estimating the funding needs to close the service gaps in water and sanitation, transportation, electricity, irrigation, and flood protection. Exploring thousands of scenarios, this report finds that funding needs depend on the service goals and policy choices of low- and middle-income countries and could range anywhere from 2 percent to 8 percent of GDP per year by 2030. Beyond the Gap also identifies a policy mix that will enable countries to achieve key international goals—universal access to water, sanitation, and electricity; greater mobility; improved food security; better protection from floods; and eventual full decarbonization—while limiting spending on new infrastructure to 4.5 percent of GDP per year. Importantly, the exploration of thousands of scenarios shows that infrastructure investment paths compatible with full decarbonization in the second half of the century need not cost more than more-polluting alternatives. Investment needs remain at 2 percent to 8 percent of GDP even when only the decarbonized scenarios are examined. The actual amount depends on the quality and quantity of services targeted, the timing of investments, construction costs, and complementary policies. Finally, investing in infrastructure is not enough; maintaining it also matters. Improving services requires much more than capital expenditure. Ensuring a steady flow of resources for operations and maintenance is a necessary condition for success. Good maintenance also generates substantial savings by reducing the total life-cycle cost of transport and water and sanitation infrastructure by more than 50 percent.
Shock Waves: Managing the Impacts of Climate Change on Poverty
(Washington, DC: World Bank, 2016) Bangalore, Mook; Hallegatte, Stephane; Bonzanigo, Laura; Kane, Tamaro; Fay, Marianne; Narloch, Ulf; Treguer, David; Rozenberg, Julie; Vogt-Schilb, Adrien
Ending poverty and stabilizing climate change will be two unprecedented global achievements and two major steps toward sustainable development. But the two objectives cannot be considered in isolation: they need to be jointly tackled through an integrated strategy. This report brings together those two objectives and explores how they can more easily be achieved if considered together. It examines the potential impact of climate change and climate policies on poverty reduction. It also provides guidance on how to create a “win-win” situation so that climate change policies contribute to poverty reduction and poverty-reduction policies contribute to climate change mitigation and resilience building. The key finding of the report is that climate change represents a significant obstacle to the sustained eradication of poverty, but future impacts on poverty are determined by policy choices: rapid, inclusive, and climate-informed development can prevent most short-term impacts whereas immediate pro-poor, emissions-reduction policies can drastically limit long-term ones.
Adapting to Climate Change in Eastern Europe and Central Asia
(World Bank, 2010) Block, Rachel I.; Fay, Marianne; Ebinger, Jane
The climate is changing, and the Eastern Europe and Central Asia (ECA) region is vulnerable to the consequences. Many of the region's countries are facing warmer temperatures, a changing hydrology, and more extremes, droughts, floods, heat waves, windstorms, and forest fires. This book presents an overview of what adaptation to climate change might mean for Eastern Europe and Central Asia. It starts with a discussion of emerging best-practice adaptation planning around the world and a review of the latest climate projections. It then discusses possible actions to improve resilience organized around impacts on health, natural resources (water, biodiversity, and the coastal environment), the 'unbuilt' environment (agriculture and forestry), and the built environment (infrastructure and housing). The last chapter concludes with a discussion of two areas in great need of strengthening given the changing climate: disaster preparedness and hydro-meteorological services. This book has four key messages: a) contrary to popular perception, Eastern Europe and Central Asia face significant threats from climate change, with a number of the most serious risks already in evidence; b) vulnerability over the next 10 to 20 years is likely to be dominated by socioeconomic factors and legacy issues; c) even countries and sectors that stand to benefit from climate change are poorly positioned to do so; and d) the next decade offers a window of opportunity for ECA countries to make their development more resilient to climate change while reaping numerous co-benefits.
Funding and Financing Infrastructure: The Joint Use of Public and Private Finance
(World Bank, Washington, DC, 2018-06) Martimort, David; Fay, Marianne; Straub, Stephane
The paper addresses the issue of the feasible level of private finance in a contracting model of infrastructure finding and financing. It characterizes the structure of financial contracts, deriving the conditions under which both public and private finance coexist. A key feature is that access to outside finance and the regulatory decision on pricing and the amount of public subsidy, hence the extent of price recovery, are jointly determined. Mobilizing private finance requires a combination of price for the service and subsidy to the service provider that is large enough, exacerbating the fundamental tensions between financial viability through cost recovery and social inclusion. The paper then shows that the feasibility trade-off responds in non-trivial ways to changes in the economic and institutional environment likely to occur along the development path. While improvements along some of these dimensions, notably in the efficiency of bankruptcy procedures, appear to ease access to private finance, others, such as the cost of public funds, actually makes public finance more efficient. Using project data from the PPI database including information on the financial structure, the authors uncover an inverse U-shaped pattern in the share of private finance, peaking for countries in the upper-middle income range, which echoes their theoretical findings.
Rising Incomes and Inequality of Access to Infrastructure among Latin American Households
(World Bank, Washington, DC, 2017-02) Straub, Stephane; Fay, Marianne
This paper documents access to services and ownership of infrastructure-related durables in the water, energy, telecom, and transport areas, based on harmonized household survey data covering 1.6 million households in 14 Latin American countries during 1992 to 2012. The paper provides a systematic disaggregation of access and ownership rates at different levels of income and over time, and econometrically derives the country infrastructure premium, a measure of how much a household benefits from simply being located in a given country. The results show extensive inequality of access, within countries across the income distribution, but also across countries for households at similar levels of income. For water and electricity, for example, up to two-thirds of the variability in individual percentile access to infrastructure services and consumption of related assets can be explained by country residence only. In addition, few country fundamentals appear to be significant in explaining this variability, pointing to policy differences as an important determinant. The paper derives the income elasticity of infrastructure access for the full set of indicators, and uses these to estimate the time that would be needed to close the remaining gap for households at different levels of the income distribution under a "business as usual" hypothesis. Under that scenario, universal access appears to be decades away for many countries in the region. The last part discusses the policy challenges, arguing that in a context in which public budgets face strong constraints and significant increases in private investment are unlikely to be forthcoming, a large part of the solution lies in refocused investment strategies, better demand management, and improved public spending efficiency.
Rethinking Infrastructure in Latin America and the Caribbean: Spending Better to Achieve More
(World Bank, Washington, DC, 2017-04-06) Fox, Charles; Fay, Marianne; Andres, Luis Alberto; Staub, Stephane; Slawson, Michael; Narloch, Ulf
Latin America and the Caribbean does not have the infrastructure it needs, or deserves, given its income. Many argue that the solution is to spend more; by contrast, this report has one main message: Latin America can dramatically narrow its infrastructure service gap by spending efficiently on the right things.